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April 22, 2023

US crude that is transferred from larger tankers to smaller Aframax tankers at sea will now be allowed to be offered in the pricing window run by S&P Global Commodity Insights (Platts). This will contribute to the pricing of the world’s most important oil benchmark, the Dated Brent, which will include WTI Midland crude from early May.

The change will bring much-needed liquidity into the benchmark, but some traders have voiced concerns about the increased costs associated with the ship-to-ship transfers (STS). Platts will only assess bids, offers or trades from cargoes on board Aframax tankers that typically hold about 700,000 barrels of crude. However, most US crude flows to Europe were transported by bigger tankers that can hold about 2 million barrels. The guidance makes clear that a seller of WTI Midland can still charter a supertanker to haul its oil to Europe, which in principle then can conduct STS transfers of the cargo onto three Aframaxes.

A vessel left the port of Riga on Friday with part of the 200,000 tonnes of Russian fertilizer that Latvia seized last year, which is being shipped to Kenya by the United Nations’ World Food Programme. Several more vessels are due to transport the rest of the fertilizer that was seized in March 2022. Russia has cited the seizure as a key stumbling block to its continued participation in a Black Sea grains deal that allows Ukraine to export grains. The move comes ahead of a meeting in New York next week between Russian Foreign Minister Sergei Lavrov and U.N. Secretary-General António Guterres to discuss the grains deal, among other issues.

The US Department of Energy (DOE) has announced changes in how it approves requests by companies to push back start dates for liquefied natural gas (LNG) export projects to get a better picture of true demand for the fuel. Under the new policy, the DOE will no longer consider a new application for a seven-year commencement extension unless companies prove they have physically started construction on an LNG export facility or face extenuating circumstances.

The measure is one in a series of new orders announced by the DOE’s office of fossil energy and carbon management aimed at keeping the US on track to meet its goal of net zero emissions by 2050 while supplying allies with natural gas. The agency also announced that it has made a decision on two pending applications. It will approve a first-time request by Port Arthur LNG, LLC and Sempra to extend the start date at the Texas terminal to 2028 and reject a second extension request by Energy Transfer’s Lake Charles Exports’ project in Lake Charles, Louisiana.

Japan has received its first shipment of independently-certified low-carbon ammonia, which marks a significant step in the development of sustainable energy solutions. The ammonia, produced by SABIC Agri-Nutrients, was delivered to Japan by Mitsui O.S.K. Lines, and subsequently transported to the Sodegaura Refinery for use in co-fired power generation. Japan plans to harness ammonia as a fuel source for both power generation and an alternative fuel for shipping, aligning with the country’s 2050 decarbonization goals. Ammonia can play a crucial role in reducing carbon emissions, and low-carbon ammonia is both a means to transport hydrogen and a valuable energy source capable of decarbonizing key sectors.

Proman Stena Bulk, a joint venture between Stena Bulk and Proman, has successfully executed the first-ever barge-to-ship methanol bunkering operation on the US Gulf Coast. Kirby tanker barge refueled methanol to Proman Stena Bulk’s tankers, Stena Pro Marine and Stena Prosperous, while they were discharging clean petroleum products at a terminal in Port Houston. Stena Pro Marine and Stena Prosperous are two of Proman Stena Bulk’s six methanol-fueled vessels. Conventional methanol from natural gas eliminates SOx and particulate matter, reduces CO2 emissions by up to 15%, and cuts NOx by 60%. This operation supports US ports and shipping companies’ sustainability efforts to increase the deployment of alternative fuels and clean energy sources.

Italian authorities discovered 850 kilos of cocaine hidden in the Liberia-flagged bulk carrier, Atlas, which is owned by Greek Laskaridis Shipping. The cocaine worth approximately US$165 million was found in 570 packages in the ship, which arrived at the port of Venice from the port of Santos in Brazil. The captain and crew members have denied any involvement in the incident, and no seafarers have been arrested yet. The investigation is ongoing, and more cocaine could be found.

North Caspian Operating Company (NCOC) is challenging the Atyrau regional department of the Kazakh Environmental Protection Ministry’s demand for a $5.1 billion fine over environmental compliance violations. NCOC manages Kazakhstan’s Kashagan, the country’s second-largest oil development, in the shallow-water sector of the Caspian Sea. NCOC asked the regional administrative court in Atyrau to annul the results of the inspections and the fine, arguing that the inspections lost their legal validity when the department made their findings public. NCOC also denied an emergency flaring of sour wet gas at Kashagan’s onshore processing plant at Bolashak. The next hearing of the case is expected in May, and Kazakhstan authorities are also disputing clauses of the Kashagan production-sharing agreement at an international arbitration.

The Canadian government has approved the Roberts Bank Terminal 2 Project, which will build a new three-berth marine container terminal and new land in the Port of Vancouver. The project will increase Canada’s west coast box capacity by approximately one-third and deliver an additional 2.4 million TEUs of container capacity. The project is expected to bring more than 18,000 jobs during construction, over 17,300 ongoing jobs, and an estimated US$2.2 billion in GDP annually. The project will also generate around US$465 million in tax revenue to support services for Canadians. The project aligns with Port of Vancouver’s vision to make the port the world’s most sustainable port, reflecting indigenous priorities, and protecting and enhancing the natural environment.

You can read yesterday’s issue of ‘Currents’ here.

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